Charities of convenience: causing confusion and a pickle for the sector

Perception is all-important for the sector when the essence of charities and their independence come under scrutiny, writes Matthew Sherrington

When is a charity a charity, and when is it not? A peculiar question, perhaps, given the charity sector is a big and inclusive tent. But in these days where perception counts as reality, perhaps it’s a fair question, and the answer is when the public wouldn't think of it as one.

That breadth and diversity is something to celebrate. But it also means generalisations are generally meaningless, and yet get used to beat up the sector when it suits its detractors. Because quite a number of organisations that are charities wouldn’t be recognisable as such by the public. And they don’t necessarily think of themselves that way either.

Take Tate, which last week refused to contribute to the new Fundraising Regulator. Reasonably, they argued, they don’t raise money from the public through means being regulated. More interestingly, they said: "Tate is an executive non-departmental public body sponsored by the Department for Culture, Media and Sport". ‘Charity’ doesn’t feature high in how they see themselves.

Charity status is by and large granted for meeting public benefit requirements, but sought for tax breaks and access to charitable and other grants. And so we have private hospitals and schools, housing associations, arts organisations, quangos, foundations and professional institutes that, while they might run as non-profits for greater or lesser public benefit, don’t generally raise money from the public, who may not know of them, and are unlikely to think of them as charities. Not like they would a ‘cancer charity’, ‘animals charity’, or ‘children’s charity’.

This matters when charities at large get skewered on executive pay, for example. The impression high salaries give is of CEOs running charities as businesses in their own self-interest. Galling perhaps, given the experience and dedication of most, but there you have it. And skewered they have been. On BBC Radio 4’s Moral Maze a few weeks ago, Michael Portillo got away unchallenged with his assertions about ‘quarter-million-pound salaries".  Just 30 charity CEO salaries are over £250k, and of those, only two would be recognisable by the public as 'charity' charities, relying on the generous public’s donations.

Last week I was approached by a charity for advice in accessing global foundation money. I use the word loosely now, because they were already a multi-million-pound private company that became a charity just last year with the express purpose of accessing foundation funds. NCVO in its latest Almanac on the state of the sector ascribes some of the sector’s income growth to the ‘charitisation’ of former public bodies, such as Canals and Rivers Trust and English Heritage. This is perhaps just one step on from the high volume outsourcing of services by government to charities over the last 15 years, bringing with it some of the service delivery culture that has distanced charity leadership from appreciating public supporters and worrying about what they think.

And so you get the Chair of a housing association shrugging ‘it happens' as he evicts tenants in order to make a quick buck, before being seen off by Stella Creasy. Profit before people, never a good look for a charity. And the hybrid charity/company Which? paying executives up to £800,000, which in the commercial world might have some logic, but doesn’t sit well wearing a charity hat as well.

This matters when the core values of charities are called into question, as they have been when fundraising practices, commercial deals and salaries don’t fit the public perception of what a charity should be up to. It matters, when the growth of service delivery by charities through government contracts challenges the essential identity of what being a charity means. Why should sub-contractors be able to criticise us, say the government. That essence of charity identity, independence, is further undermined, as the recent Civil Exchange report "Independence in Question" warns.

And independence matters, when the government is curtailing the right of charities to speak out and campaign, and when health charities explore the benefits of working together with the NHS to deliver services more effectively, as recently published by New Philanthropy Capital. Without question, these charities are driven by the right motivations of improving patient outcomes, but will the government see more than the money they might bring? I’m sure they know to tread carefully.

Values, independence, and identity. Charities of convenience become see-through by these measures of public perception. But the light has to shine on them in the first place for distinctions to be appreciated. Otherwise, the fact that they don’t have to worry about public opinion and support risks their damaging the sector at large. The sector needs to work on the values that hold it together, but there are some big cultural fault lines that need attention.

Matthew Sherrington is a charity leadership and communications consultant at Inspiring Action. @m_sherrington

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